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Estonian and Lithuanian micro-enterprises to receive European support with Finora Capital

  •  
    Date: 06 April 2021
  • 2 million EIF loan to Finora Capital to increase micro-lending in Estonia and Lithuania, supported by the EU’s programme for Employment and Social Innovation (EaSI).
  • Under the agreement, Finora expects to serve more than 100 micro-enterprises in the two Baltic States with new, long-term lending under favourable conditions.

More support will become available for micro-enterprises in Estonia and Lithuania that are facing the economic fallout of the COVID-19 crisis. A new transaction between the European Investment Fund (EIF) and financial intermediary Finora Capital is expected to support at least 100 micro borrowers in these two countries. The long-term working capital loans offered by Finora will be essential in providing liquidity to companies during the post-COVID-19 economic recovery. The operation is backed by the EaSI Funded Instrument under the EU programme for Employment and Social Innovation.

The EIF loan will allow Finora Capital, a fully digital, alternative finance providing company, to offer loans and leasing to bigger number of micro-enterprises at more favourable terms than so far.

Alain Godard, Chief Executive of the EIF, commented on the deal by stating: “Finora’s focus on SME-financing, and particularly micro-lending, adds an important piece of the puzzle when it comes to access to finance in the Baltics. Micro-enterprises are an important part of the local economy, currently significantly impacted by COVID-related uncertainties, and we’re glad to be partnering with Finora to help them prepare for the return to normal economic circumstances.”

Nicolas Schmit, Commissioner for Jobs and Social Rights, said: “As small businesses in Europe struggle to cope with the fallout of the pandemic, the EU is doing what it can to support them and preserve jobs. With financial backing from the EU’s Employment and Social Innovation programme, micro-enterprises in Estonia and Lithuania will have improved access to loans, getting a welcome boost for their businesses to thrive again.”

Andrus Alber, the CEO of Finora Capital, said “Smaller credit companies have difficulties to raise financing at reasonable cost of capital as capital markets in Baltic region are not well developed and banks are often not interested to cooperate with smaller market participants. EIF is well positioned to mitigate this market inefficiency with its credit line to Finora.”

Background information:

The European Investment Fund (EIF) is part of the European Investment Bank Group. Its central mission is to support Europe's micro, small and medium-sized enterprises by helping them to access finance. It designs and implements venture and growth capital operations, as well as guarantee and microfinance instruments specifically targeting this market segment. In this role, the EIF fosters EU objectives in support of innovation, research and development, entrepreneurship, growth, and employment.

Finora Capital is an Estonian FSA licensed credit provider. Finora currently provides mortgage-based loans, factoring, working capital loans, leasing and guarantees to SMEs in Estonia and Lithuania.

The European Union Programme for Employment and Social Innovation ("EaSI") aims at supporting the EU's objective of high level employment, adequate social protection, fighting against social exclusion and poverty and improving working conditions. The microfinance and social entrepreneurship axis of the EaSI programme provides support to financial intermediaries that offer microloans to entrepreneurs or finance to social enterprises. The objective is to increase access to microfinance, which includes microcredit i.e. loans of up to EUR 25,000, in particular for vulnerable persons and micro-enterprises. In addition, for the first time, the EU is supporting social enterprises through investments of up to EUR 500,000. The microfinance and social entrepreneurship support is currently being implemented through the EaSI Guarantee, which enables financial intermediaries to reach out to (potential) entrepreneurs that would not have been able to gain finance otherwise due to risk considerations. It is also being implemented through the EaSI Capacity Building to reinforce the capacity of financial intermediaries in the areas of microfinance and social finance through equity investments; and the EaSI Funded Instrument, which provides senior and subordinated loans to microfinance institutions and social enterprise lenders to boost on-lending to micro-enterprises and social enterprises. The European Commission has selected the EIF to implement the EaSI financial instruments.

 

Press Contacts:

EIB Group: Tim Smit, tel.: +352 691 28 64 23, t.smit@eib.org, Follow us on Twitter and Instagram
Website: www.eib.org/press - Press Office: +352 4379 21000 – press@eib.org

Finora Capital: Andrus Alber, +372 658 1300, andrus.alber@finoracapital.eu

European Commission: Flora Matthaes, +32 460 755148, flora.matthaes@ec.europa.eu

 

 

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